A speech by Bernanke, released earlier, was seen as balanced about risks to growth and inflation.
"There was nothing new there, which makes it seem that the Fed is going to stay on hold," said Peter Cardillo, chief market economist at Avalon Partners.
The Dow Jones Industrial Average was down 47 points to 13,628, as 24 of its 30 components retreated, led by shares of Dupont , Merck & Co. , and Home Depot Inc. .
"This is basically a market that's consolidating," Cardillo said.
Among blue chips, DuPont fell 1.8% after Lehman Brothers downgraded the stock to equal weight from overweight, citing valuation and seasonal factors.
General Motors Corp. and Walt Disney Co. both rose slightly as they held analyst presentations.
The S&P 500 index eased 5.1 points to 1,534, while the Nasdaq Composite lost 6.9 points to 2,611.
Trading volumes showed 488 million shares exchanging hands on the New York Stock Exchange and 731 million trading on the Nasdaq stock market. Declining stocks topped gainers by 21 to 9 on the NYSE and by 17 to 10 on the Nasdaq.
By sector, software , natural gas , gold and transportation all fell by over 1%. Other declining sectors included broker/dealers and pharmaceuticals .
Retail stocks were also under pressure. Helping to dampen sentiment, Bed Bath & Beyond fell 5% after the retailer issued its first-ever profit warning as a public company. Goldman Sachs downgraded the stock to neutral from buy.
Since last week, investors have monitored rising bond yields, which challenge the relative attraction of risk-taking in stocks.
Bernanke's remarks, which predicted moderate growth ahead for the U.S. economy, were seen as upbeat, and pressured bond prices, lifting yields further.
In recent action, the benchmark 10-year Treasury bond was down 7/32 at 96 14/32 in price, pushing its yield, which moves inversely to price, up to 4.951%.
Putting further pressure on bonds, the Institute for Supply Management said the service-sector of the U.S. economy grew at a robust pace in May, the Institute for Supply Management reported Tuesday.
The ISM nonmanufacturing index rose to 59.7% from 56% in April. It's the highest since April 2006. Economists surveyed by MarketWatch were looking for a pullback to about 55%.
"This market managed to shrug off China yesterday," Avalon's Cardillo said. "This market is doing its own thing with all the M&A still out there."
U.S. stocks ended Monday with a modest rise, overcoming a tumble in Shanghai-listed stocks, rising crude-oil prices.
Overnight, the Shanghai Composite lost 7% before recovering and closing on a 2.6% gain.
Treasury Secretary Henry Paulson is also due to be speaking on the U.S.-Chinese economic relationship, a topic of increased focus amid the gyrations of Chinese stock markets in the last week.
In new deal developments, Avaya gained 2.2% after agreeing, as rumored, to be bought by TPG Capital and Silver Lake Partners for $8.2 billion, or $17.50 a share in cash.
Amgen gained 1% after agreeing to buy privately held Ilypsa for $420 million. For nearly the same amount, Ericsson agreed to buy German billing software firm LHS.
Crude oil prices fell back as some traders considered the recent rally on weather-related production concerns in the Persian Gulf and tension between Russia and the West to be a bit overdone for now.
Gold prices still managed to rise slightly, helped by dollar weakness .
The dollar was weaker against major currencies, as investors viewe Bernanke's speech and remarks as unlikely that the Fed might hike interest rates.
By Nick Godt